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This study aims to help develop “business principles for stakeholder capitalism” in two steps. First, the study defines internal logic of three theories of capitalism and two variants within each theory. Second, it examines approaches to integration into modern democratic capitalism. Treating the three theories as substitutes identifies relative strengths and weaknesses; complementarity and partial overlap approaches to integration study the institutional settings within which stakeholder capitalism operates. Empirical outcomes reflect competition between market and stakeholder businesses for participants, with institutional conditions determining the scope of collective action.

The approach aligns three typologies in a unique conceptual arrangement defining the three theories of capitalism: forms of capitalism, potential failures of each form and associated types of goods. The first method examines the internal logic of each theory of capitalism. The second draws on traditional narrative review of references documenting each theory of capitalism and variants together with modern Marxist anti-capitalism.

Three typologies align uniquely with the theories of capitalism, each having two variants. Both variants of stakeholder capitalism are compatible with compassionate capitalism, constitutional government or polycentric governance but not with self-interest capitalism, dictatorship or Marxism. A theory of modern democratic capitalism allocates roles for private, club and social goods with empirically variable mixes occurring across countries. Competition among different types of enterprises provides an empirical test for comparative advantages of stakeholder capitalism. Future research should consider approaches for testing the proposed conceptual scheme in practice concerning capacity to deal with grand challenges, wicked problems and black swan events.

Research approach is limited to logical examination of theories and literature documentation without direct empirical confirmation. The study does not address practical implications for managers and public officials or social implications concerning private incentives, stakeholder cooperation or collective action.

Originality lies in shifting terms of debate about stakeholder capitalism from advocacy of substitute theories to understanding of its relationship to market capitalism and collective action capitalism. Value lies in explaining desirability of theoretical integration of three types of capitalism into a comprehensive framework for modern democratic capitalism.

This chapter highlights some of the tensions and most promising points of convergence between the strategic management and stakeholder theory literatures. We briefly examine the early development of both areas, identifying some of the background assumptions and choices that informed how the fields evolved, and how these factors led the two fields to engage in scholarly pursuits that seldom intersected for a period of years, followed by a renewal of interest among strategists in themes that are central to stakeholder theory. From this discussion, we develop a larger agenda with specific topics as examples of areas that offer promise for integrative research that can advance knowledge in both fields. Our vision of the future is one in which the larger aspirations of scholars in strategy and stakeholder theory are more fully realized with human purposes, broadly defined, as the focal point.

One way of looking at the association between ethics and stakeholder theory – of examining the idea that stakeholder theory has a strong moral foundation – is to consider how the stakeholder approach might in fact be directly driven by and guided by the moral obligations of business. An alternative perspective we offer is that stakeholder theory only indirectly derives from the moral obligations of business, with business purpose serving as a mediating factor. We work through the fairly straightforward logic behind that alternative perspective in this chapter. We argue that it is a better way to think about the association between ethics and stakeholder theory, particularly because it allows for a theoretical and practical distinction between corporate social responsibility and stakeholder theory. Stakeholder theory can thereby continue developing as a theory of strategic management, even as it brings morals to the fore in ways that other approaches to strategic management do not.

This chapter examines the literature surrounding stakeholder theory. Section 2.2 outlines the nature of what is a stakeholder, whereas Section 2.3 overviews the literature on social accounting and reporting and details how it served as an antecedent to the specific literature on stakeholder management. Section 2.4 covers the mainstream literature on stakeholder management by examining the three distinct categories of stakeholder literature as outlined by Donaldson and Preston (1995): (1) descriptive; (2) instrumental; and (3) normative. The normative category includes a discussion on how the theory's fundamental aspects have been rejected outright by some authors, as a basis for a theory of the firm, due to the perceived paradox in relation to the firm's multi-fiduciary duty beyond the shareholder. Section 2.5 summarises the literature to date and outlines its main limitations, including the primary emphasis on seeking to normatively ground the theory. Section 2.6 then provides the conclusions with a table summarising the research objectives and outcomes.

Theories of management require normative justification; that is, they rely on some conception of what is morally good, right, and just. This chapter examines some of the normative reasons for adopting a stakeholder theory of management and for rejecting the once, and perhaps still, “dominant” shareholder-centric approach. This chapter then surveys some of the prominent “normative cores” that are used to ground stakeholder theory, that is, Kantian, contractarian, feminist ethics, and ethical pragmatism, and the moral obligations that each normative approach generates. Some pressing questions are raised with respect to each normative approach. To what extent ought we to recognize imperfect obligations to shareholders? Are contractarian hypernorms morally substantive? How exactly should we care about stakeholders, and is care even an appropriate attitudinal response? Without some commitment to objective ethical standards, how can pragmatists resolve stakeholder conflict?

This chapter reviews the relevant theories associated with sustainability reporting, in its first section nine theories supporting sustainability reporting were discussed. In the following section four theories against sustainability reporting were explained. The last section is the theoretical framework used in this book. The theoretical framework built based on integration of three theories: stakeholder theory, legitimacy theory and political-economy theory.

Stakeholder theory has been accused of being an umbrella concept rather than a distinct theory per se. Recognizing the stakeholder concept as an essentially contested concept subject to multiple competing interpretations, this chapter presents a systematic meta-level conceptual analysis. This chapter aims to contribute to the optimal development of stakeholder theory by clarifying the conceptual confusion surrounding its central construct to help prevent stakeholder theory from developing into an accumulation of disparate ideas. Multi-contextual contributions to stakeholder theory are analysed via an unparalleled bounded systematic review of 593 stakeholder definitions. Determinants of the stakeholder concept have been deconstructed and analysed to establish how definitional variables relate to variants of stakeholder theory. These determinants have been sorted, filtered and ordered to produce a comprehensive, multi-dimensional classification of stakeholder theory based on four hyponyms which relate to 16 definitional categories. The classification was then subjected to empirical testing with positive results. This evaluation of the stakeholder concept illustrates how contributions are aligned and interrelated, thereby prescribing what is acceptable (unacceptable) as inclusion within stakeholder theory. An invaluable overview of what we know about stakeholder theory is presented within a single model, drawing the conclusion that stakeholder theory is indeed a single theory.

Sustainability has long been known to present an epistemic challenge. In the corporate setting, this challenge translates into the difficulties experienced by managers not only in devising solutions to corporate sustainability problems, but even in developing the awareness of the latter. The paper explores how these difficulties may be overcome by corporate stakeholder management policies.

The paper develops a conceptual framework that reconstructs the Hayekian theory of market process in the context of Williamson's (1996) distinction between autonomous and cooperative adaptation.

Applying the Hayekian theory of market process to the process of engagement and collaboration of corporate stakeholders, the paper shows how the latter process may address the epistemic challenge of corporate sustainability and derives implications for the design of business models for sustainability.

The paper informs stakeholder theory in two ways: first, stakeholder theory is given a novel justification in terms of reflecting the growing prominence of cooperative adaptation and second, corporate stakeholder management is shown to be crucial for maximizing not only economic but also sustainability performance.

The purpose of this study is to conduct a systematic review of the literature of the studies that have examined several theoretical perspectives on corporate social performance (CSP) and identify possible future research questions based on various theoretical viewpoints.

The study used systematic literature review analysis on a sample of 667 studies published in top A* and A category journals listed in the Australian Business Dean Council list. The present study derived articles between 1975 and 2023 from the SCOPUS database by using relevant keywords to identify research activities in CSP.

The findings suggest that many studies on CSP have been undertaken globally. But there is a lack of studies on various theoretical perspectives, including peer uncertainty evaluation, buyer–supplier sustainability links, the role of primary stakeholders (especially consumers, employees, suppliers and secondary stakeholders), the use of technology, firm-related heterogeneities, and the role of demographic and socio-economic factors. Future research areas are recommended.

The study investigates existing research gaps to identify possible future research questions and frameworks that can be explored to advance the research on CSP.

The research also provides implications for firms in terms of understanding diverse theoretical perspectives to develop strategies to improve a firm’s social performance.

The findings are derived from a systematic review of the literature in top-category studies that examined existing theories and frameworks in the CSP domain. This highlights the importance of other understudied complementary theories, such as complexity theory, spillover theory, critical mass theory, slack theory and so on, and related variables that can improve a firm’s social performance. Evaluation of existing theoretical perspectives is not included in other review studies.